FATTENING WALL STREET — Mike Whitney reports on the rapid metamorphosis of new Fed Chair Janet Yallin into a lackey for the bankers, bond traders and brokers. The New Religious Wars Over the Environment: Joyce Nelson charts the looming confrontation between the Catholic Church and fundamentalists over climate change, extinction and GMOs; A People’s History of Mexican Constitutions: Andrew Smolski on the 200 year-long struggle of Mexico’s peasants, indigenous people and workers to secure legal rights and liberties; Spying on Black Writers: Ron Jacobs uncovers the FBI’s 50 year-long obsession with black poets, novelists and essayists; O Elephant! JoAnn Wypijewski on the grim history of circus elephants; PLUS: Jeffrey St. Clair on birds and climate change; Chris Floyd on the US as nuclear bully; Seth Sandronsky on Van Jones’s blind spot; Lee Ballinger on musicians and the State Department; and Kim Nicolini on the films of JC Chandor.

The Free Market: Means or End?

by JASON BERNARD CLAXTON

Free market advocates sometimes champion the free market as a means to an end, sometimes as an end in itself. Sometimes the free market is better at achieving certain goals than any alternative, sometimes there is no alternative. Sometimes the free market is the best way of achieving prosperity, security, and a good life for a people, sometimes the free market is “the only moral system.” If it were clear at any given moment which justification were being offered, a lot of confusion might be avoided. But free market advocates often take both positions within the same argument – a strategy that is rhetorically effective, but logically dubious.

When an owner’s right to dispose of property exactly as that owner desires is considered morally ultimate, then the free market becomes an end in itself. And if individual property rights are so sacred that no state of affairs that market intervention could possibly bring about would justify the rights violations that market intervention implies, then it simply wouldn’t matter whether more market regulated economies are more productive than free market economies. It wouldn’t matter whether more “socialistic” economies have, say, lower infant mortality and poverty rates, or higher literacy, job satisfaction, and social mobility rates than more free market oriented economies. All that matters is that individual property rights, which are supreme, are not violated. As long as this condition is met, the consequences of the free market system don’t matter at all.

If, on the other hand, individual property rights represent not a supreme concern, not an utterly inviolable set of rights, but rather one set of concerns among many, all of which must be weighed against each other and delicately balanced, then consequences do matter. And if consequences matter, then the comparative claim that freer markets necessarily equal greater prosperity would have to be tested. And the claim can be tested: All we need to do is define those benchmarks that free markets are supposed to deliver with so much more efficiency than any alternative. Then we can compare the performance of economies with more market intervention to economies with less market intervention. One type of economy will meet the benchmarks better than the other. If, with enough ingenuity, we can isolate all the relevant factors, then we will be able to answer the comparative question, one way or another.

The distinction between free markets as a means and free markets as an end may seem subtle at first, but it yields an important consequence. The distinction helps us realize that one justification (“the market is the only moral system”) rests on moral grounds, and the other (“markets function better than any alternative”) rests on empirical grounds. This clarifies the point being argued. It makes it possible to determine what kind of evidence needs to be presented, and what kind of argument will prove the case.

It is infinitely more difficult to chose an end than it is to determine whether a given means will achieve that end. It will be incredibly difficult, if not impossible, for people who believe that individual property rights are ultimate and supreme to convince those that disagree that they are wrong, and vice versa. But when a claim is empirically testable – such as the claim that free markets are necessarily better at delivering certain results than any available alternative – then the claim can be objectively evaluated. One economic system will or won’t out-perform the other – and the difference won’t depend on our moral evaluation or opinion. But then, of course, we will have to debate the value of the goals one or the other system is supposed to achieve.

When free market advocates stealthily alternate between justifications, they only end up evading either argument. When intervention is on the table, they argue “That’s socialism, and socialism just doesn’t work.” That is, markets are better for prosperity than redistributive market intervention. In the face of evidence that certain interventions might actually yield desirable results, or at least prevent certain harms, they argue “Sure, but do you really want the government telling you what to do?” The implied argument, then, must be that having “the government tell you what to do” is worse than the poverty and insecurity that a stronger social safety net could avoid.

If the free market is an end, its purpose is achieved as soon as it is instituted. It is not good for any further purpose. It meets its goal immediately and perpetually. Its value is inherent. As a means, the free market’s value is not inherent, but instrumental. It is subservient to the values it is supposed to promote. Its value lies in its ability to deliver certain results, and its own value is always relative to the value of those results. The free market can’t be both end and means. Arguing both is logically inconsistent. But since logical consistency isn’t a requirement for persuasive marketing, free market advocates will surely continue to sacrifice one for the other.